TiVo to measure ad skipping for networks, advertisers

Ad-skipping users have proven to be a conundrum for the networks and …

Once you've experienced the wonder of TiVo, it can be almost painful to watch live TV. One of the biggest reasons is commercials. With a DVR, it is a trivial matter to fast-forward through them to arrive at what you really want to watch. Both broadcasters and advertisers caught on to this fact quickly, and since that time, the challenge has been to quantify the ad skipping and put a price tag on it.

TiVo has responded to the challenge and taking on TV-ratings powerhouse Nielsen Media Research at the same time by beginning to track viewers' ad-skipping habits. A new division, TiVo Audience Research and Measurement, will cover almost every aspect of ad-skipping, including which ads are skipped, the exact second at which the skipping starts, and when consumers rewind to view a skipped ad. Industry heavyweight Nielsen has already begun tracking DVR data, breaking out viewership based on how long viewers timeshifted content. More recently, the ratings company has announced an ambitious plan to track viewing across all platforms.

The whole DVR-advertising debate has been brewing for a couple of years. In 2004, Forrester Research released its first survey on the topic, finding that advertisers planned to cut their TV budgets by up to 20 percent in the coming years. In an attempt to mollify advertisers and broadcasters, TiVo decided to try substituting old commercials from recorded shows with new ones and deploy pop-up ads that would appear while consumers fast forward through recorded commercials.

These days, ad agencies are even more leery of viewers' commercial-watching habits. Things heated up to a boil during this year's fall ad-rate negotiations, when advertisers insisted on lower rates based on DVR usage. The networks cried "foul" and threatened to lock out advertisers who pushed for lower rates. The networks later caved, implicitly acknowledging advertisers' arguments that "commercials seen during DVR-recorded programming have no value."

With its new tracking, TiVo hopes to demonstrate that recorded commercials do have some value after all. The company also wants to provide some hard data to the networks and advertisers to demonstrate exactly what kind of ads catch viewers' attention. One goal is to help ad agencies craft commercials that catch the eyes of jaded DVR owners, another is to show when ads are less likely to be skipped. The company plans to start its tracking with a random sample of 20,000 TiVo users.

Lurking in the background is declining television viewership. With more choices for viewers and alternatives to watching TV (e.g., surfing the Internet, playing video games), advertisers and broadcasters are squabbling over a piece of an ever-shrinking pie. In such a climate, TiVo's new tracking service is likely to find many eager customers.